Tampa Bay Food Courts by Bob Andelman

Some days there isn't time for a Pinellas businessperson to set aside 60 or 90 minutes for a formal sit-down lunch with a Hillsborough counterpart. Maybe they just need a convenient place to meet, grab a sandwich, swap paperwork, tell tales on the boss and hit the road.

They'll probably do it at the West Shore Plaza food court.

Maybe that's an extreme example. Because when the lunch bell blows at office complexes near Tampa Bay Center, Tyrone Square or Clearwater Mall, many a salaryman and salarywoman head for the nearest mall food court. They find the fast-food equivalent of an international bazaar, with choices ranging from traditional American delicacies such as cheeseburgers and Cokes to Chinese, Japanese, Italian and Cajun specialties.

It can take weeks for adventurous diners to sample everything, although many stick with the familiar. And no matter where diners stand in line to buy their meal, they wind up sitting next to someone who bought an even more curious, brightly-colored food product.

Food courts gained "hot" status in American shopping malls a decade ago and Tampa Bay centers are rushing to keep up.

Because there hasn't been a new mall in the market for so many years, only Tampa Bay Center was originally designed with a food court. Other malls in the region have had to re-shuffle tenants or expand to make the concept work, including Clearwater, Countryside and West Shore Plaza. In its recent facelift, Tyrone Square brought its food vendors into a central corridor near the AMC Theaters, adding tables and chairs to a common area. But unlike other centers, all of its vendors have individual seating as well.

Having a food court does not instantly mean that food court will be successful. Location, of course, makes a huge impact in more ways than one.

"Our problem," says Countryside Mall manager Bill Carnes, "is we don't have the density of office nearby." As a result, the lunch trade isn't as strong as, say, West Shore Plaza, which sits in the midst of an office district, or even nearby Clearwater Mall, which is surrounded by offices, apartment complexes, a trailer park and condominiums. The food court at Countryside, despite abundant seating capacity and a choice of 14 vendors, has three or four slots which turn over regularly while better situated courts can't keep up with demand.

"This center does a very good lunch hour," says Clearwater Mall G.M. Rob Courtney. "On a day when it's cloudy or raining, it's that much more crowded."

The downside of the lunch hour rush is that non-food court tenants may never see the business crowd. They don't call it a lunch hour for nothing.

Tenants pay a premium for food court space, shelling out much more per square foot than any other category of tenant. Unlike Tyrone Square vendors, most food court operators lease only food preparation space, typically 400-800 square feet. (The same tenant in a non-food court location might need 2,500 square feet with seating.)

"In most shopping malls, rent is a function of sales volume. Every tenant pays a guaranteed rent versus a percentage," says Andy LaGrega, senior vice president of Wilder Management Associates, the Massachusetts-based firm which manages West Shore Plaza.

"We have a good handle on how much a tenant in a food court should and can produce in total volume. We know what percentage they can afford. We don't rent food court locations by the square foot. We look at anticipated revenue and back into the rent. Obviously, after you make your deal you can divide your square feet by the rent, but that's not how we approach it."

Food court tenants at West Shore Plaza pay rent and triple-net charges including charges for food court maintenance.

"It's a high-budget number," LaGrega says. "We want to be sure that table is clean within 20 seconds of somebody leaving it during peak periods. We've got to be very efficient with the use of every one of these tables."

Depending on the size of a mall and whether it is in an urban or suburban location (urban malls have a built-in lunch market), LaGrega says the average food court tenant will generate between $400,000 and $1-million annually. Rent averages between 10 and 14 percent of gross sales. Maintenance fees reflect approximately 3 to 4 percent of gross sales.

"If you take an anticipated average sales volume of $600,000 and take 12 percent as an average 12 percent of $600,000 is $72,000. And if their space is 600 square feet, their occupancy cost can be as much as $120 per square foot," LaGrega says. "It's all a matter of volume. Tenants don't mind paying rent if they're doing the volume."

"What they're paying for," agrees Courtney," is frontage."
Outside the food court, by comparison, the average West Shore Plaza in-line tenant pays $25 to $75 per square foot, exclusive of department store anchor space and jewelry stores (which pay higher rates because of their sales volume).

Although it usually is left unwritten in leases, most food courts provide and tenants expect a measure of exclusivity in their category. Where there's McDonald's, diners won't find Burger King or Wendy's. It's not in the landlord's best interest to duplicate.

Figuring into the mix is the number of seats. A food court which can't accommodate demand at lunchtime isn't going to function at its maximum potential if diners can't find a place to sit down. West Shore Plaza, which only opened its 10,000-square-foot food court a few years ago, is already looking for ways to add more seats and more tenants.

"This food court is small. We are maxxed out," LaGrega says. "We are in the process of planning the expansion of West Shore Plaza and, ideally, we'd like to incorporate a new, 25,000-square-foot contemporary food court as part of an entertainment/movie area. There's tremendous demand and a waiting list."

National chain operators tend to succeed in the highly competitive food courts because of name recognition. It's a tough marketplace for ill-prepared local franchise operators, regional food vendors or independent entrepreneurs. "That's true whenever a Mom & Pop doesn't have the marketing or direction the nationals have," says Clearwater Mall's Courtney. "People establish a comfort level with certain retailers. Familiarity lends itself to people going back to a product."

Taken as a whole, food courts act as anchor tenants in most malls, becoming destination magnets particularly at lunchtime.

University Mall, in the throes of a major expansion in which Dillard's will build a new store, plans to carve out a 10,000-square-foot chunk of the old store's second floor for a food court.

"There isn't enough food in the center right now," says Pat Severance, vice president and regional director of leasing for Heitman Retail Properties in Chicago, which manages University. "But there's incredible demand from food court operators who want to go into the center."

University's new food court expected to open by June 1996 will be adjacent to a game room, a 6,300-square-foot Musicland, and a 16-screen Cobb Theater. "Besides being an amenity to the mall," Severance says, "the food court will free up some space currently occupied by food. Chick-Fil-A has a great, 2,000-square-foot location in the main mall. But we would rather have a more traditional retailer there."

Chick-Fil-A will relocate to the food court, as will Bresler's Ice Cream and A&W Hot Dogs & More. Barney's Coffee & Tea will stay where it is, but Severance hopes the company will locate a Barney's Express in the food court. Meanwhile, Ruby Tuesday's will become a Mozzarella's Cafe, and the two Cobb Theaters at the front of the mall will be replaced by a restaurant.

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